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Gabelli Utility Trust Continues Monthly Distributions, Declares Distributions of $0.05 Per Share

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The Gabelli Utility Trust (NYSE:GUT) Board of Trustees has approved the continuation of its fixed monthly cash distributions policy, declaring $0.05 per share for January, February, and March 2025. The distributions will be paid on respective dates in each month. The Board continues to evaluate strategic opportunities in the current market environment. The Fund has maintained monthly distributions since October 1999. Currently, shares are trading at a premium to net asset value, which the Board believes may not be sustainable. The 2024 distributions comprise approximately 4% from net investment income and 96% return of capital on a book basis.

Il Consiglio di Amministrazione del Gabelli Utility Trust (NYSE:GUT) ha approvato la continuazione della sua politica di distribuzione mensile fissa in contante, dichiarando $0,05 per azione per i mesi di gennaio, febbraio e marzo 2025. Le distribuzioni saranno pagate nelle relative date di ogni mese. Il Consiglio continua a valutare opportunità strategiche nell'attuale contesto di mercato. Il Fondo ha mantenuto distribuzioni mensili dal ottobre 1999. Attualmente, le azioni vengono scambiate a un premio rispetto al valore netto delle attività, il quale, secondo il Consiglio, potrebbe non essere sostenibile. Le distribuzioni del 2024 comprendono circa il 4% da redditi netti da investimenti e il 96% di restituzione di capitale su base contabile.

La Junta de Fideicomisarios de Gabelli Utility Trust (NYSE:GUT) ha aprobado la continuación de su política de distribuciones mensuales en efectivo fijas, declarando $0.05 por acción para enero, febrero y marzo de 2025. Las distribuciones se pagarán en las fechas correspondientes de cada mes. La Junta sigue evaluando oportunidades estratégicas en el actual entorno del mercado. El Fondo ha mantenido distribuciones mensuales desde octubre de 1999. Actualmente, las acciones se cotizan a una prima sobre el valor neto de los activos, lo que la Junta cree que podría no ser sostenible. Las distribuciones de 2024 comprenden aproximadamente 4% de ingresos netos de inversión y 96% de retorno de capital sobre una base contable.

가벨리 유틸리티 신탁(Gabelli Utility Trust, NYSE:GUT) 이사회는 고정 월 현금 배당금 정책의 지속을 승인하며, 2025년 1월, 2월, 3월에 대해 주당 $0.05를 선언했습니다. 각 달의 해당 날짜에 배당금이 지급될 예정입니다. 이사회는 현재 시장 환경에서 전략적 기회를 평가하고 있습니다. 이 펀드는 1999년 10월부터 월별 배당금을 유지해왔습니다. 현재 주식은 순자산 가치보다 프리미엄으로 거래되고 있으며, 이사회는 이것이 지속 가능하지 않을 수 있다고 믿고 있습니다. 2024년 배당금은 순 투자 소득의 약 4%와 자본 환급의 96%을 포함하고 있습니다.

Le Conseil d'Administration du Gabelli Utility Trust (NYSE:GUT) a approuvé la poursuite de sa politique de distributions mensuelles fixes en espèces, déclarant 0,05 $ par action pour les mois de janvier, février et mars 2025. Les distributions seront payées aux dates respectives de chaque mois. Le Conseil continue d'évaluer les opportunités stratégiques dans l'environnement de marché actuel. Le Fonds maintient des distributions mensuelles depuis octobre 1999. Actuellement, les actions se négocient à une prime par rapport à la valeur nette d'inventaire, ce que le Conseil pense ne pas être durable. Les distributions de 2024 comprennent environ 4 % de revenus nets d'investissement et 96 % de retour de capital sur une base comptable.

Der Vorstand des Gabelli Utility Trust (NYSE:GUT) hat die Fortführung seiner festen monatlichen Barausschüttungen beschlossen und eine Ausschüttung von $0,05 pro Aktie für Januar, Februar und März 2025 erklärt. Die Ausschüttungen werden an den jeweiligen Daten in jedem Monat ausgezahlt. Der Vorstand bewertet weiterhin strategische Möglichkeiten im aktuellen Marktumfeld. Der Fonds hat seit Oktober 1999 monatliche Ausschüttungen aufrechterhalten. Derzeit werden die Aktien mit einem Aufschlag auf den Nettoinventarwert gehandelt, von dem der Vorstand glaubt, dass er möglicherweise nicht nachhaltig ist. Die Ausschüttungen für 2024 setzen sich aus etwa 4% aus Netto-Anlageerträgen und 96% Kapitalrückgewähr auf Buchbasis zusammen.

Positive
  • Consistent monthly distribution policy maintained since October 1999
  • Fixed monthly distribution of $0.05 per share confirmed for Q1 2025
Negative
  • Shares trading at potentially unsustainable premium to NAV
  • 96% of 2024 distributions classified as return of capital, indicating distributions exceed earnings
  • Only 4% of distributions sourced from net investment income

Insights

The continuation of $0.05 monthly distributions by Gabelli Utility Trust carries significant implications for investors. Most notably, 96% of 2024 distributions are classified as return of capital, with only 4% from net investment income. This structure effectively returns investors' original investment rather than generating new value, which could be concerning for long-term sustainability.

The Board's acknowledgment that the fund's premium to NAV may not be sustainable is a critical warning sign. Current shareholders reinvesting distributions are doing so at a premium, potentially eroding value over time. The tax treatment of distributions, while appearing advantageous with elements of qualified dividend income and long-term capital gains, masks the underlying return of capital nature of these payments.

The distribution structure presents complex tax implications that investors must carefully consider. While return of capital distributions aren't immediately taxable, they reduce the cost basis of shares, potentially leading to larger capital gains taxes upon eventual sale. The mix of 4% investment income and 96% return of capital requires sophisticated tax planning, especially considering the additional 3.8% Medicare surcharge for high-income investors.

The pro-rata allocation of different tax components across all distributions simplifies reporting but may not optimize tax efficiency for investors. The upcoming Form 1099-DIV will be important for accurate tax planning.

RYE, N.Y., Nov. 14, 2024 (GLOBE NEWSWIRE) -- November 14, 2024 – The Board of Trustees of The Gabelli Utility Trust (NYSE:GUT) (the “Fund”) approved the continuation of its policy of paying fixed monthly cash distributions. The Board of Trustees declared cash distributions of $0.05 per share for each of January, February, and March 2025.

Distribution MonthRecord DatePayable DateDistribution Per Share
JanuaryJanuary 16, 2025January 24, 2025$0.05
FebruaryFebruary 13, 2025February 21, 2025$0.05
MarchMarch 17, 2025March 24, 2025$0.05
    

Additionally, the Board of Directors continues to evaluate potential strategic opportunities for the Fund in what we believe to be an attractive environment to invest in the broader equity markets.

Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Trustees will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the financial market environment. If necessary, the Fund will pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the monthly distributions for that year to satisfy the minimum distribution requirements of the Internal Revenue Code for regulated investment companies. The Fund’s distribution policy is subject to modification by the Board of Trustees at any time, and there can be no guarantee that the policy will continue. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund. The Gabelli Utility Trust has paid a distribution to shareholders every month since October 1999.

The Fund’s shares are currently trading at a premium to net asset value. The Board of Trustees believes that the premium at which the Fund shares trade relative to net asset value is not likely to be sustainable. Shareholders participating in the Fund’s dividend reinvestment plan should note that at the current market price, the reinvestment of distributions occurs at a premium to net asset value.

All or part of the distribution may be treated as long-term capital gain or qualified dividend income (or a combination of both) for individuals, each subject to the maximum federal income tax rate for long term capital gains, which is currently 20% in taxable accounts for individuals (or less depending on an individual’s tax bracket). In addition, certain U.S. shareholders who are individuals, estates or trusts and whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surcharge on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund.

If the Fund does not generate sufficient earnings (dividends and interest income, less expenses, and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder’s original investment, it is generally not taxable and would be treated as a reduction in the shareholder’s cost basis.

Long-term capital gains, qualified dividend income, investment company taxable income, and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Based on the accounting records of the Fund currently available, each of the distributions paid to common shareholders in 2024 would include approximately 4% from net investment income and 96% would be deemed a return of capital on a book basis. This does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2024 will be made after year end and can vary from the monthly estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2024 distributions in early 2025 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call:

David Schachter
(914) 921-5057

About The Gabelli Utility Trust
The Gabelli Utility Trust is a diversified, closed-end management investment company with $359 million in total net assets whose primary investment objective is to seek long-term growth of capital and income by investing primarily in utility companies involved in the generation and distribution of electricity, gas, and water. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE – GUT
CUSIP – 36240A101

Investor Relations Contact:
David Schachter
(914) 921-5057
dschachter@gabelli.com


FAQ

What is the monthly distribution amount for GUT stock in Q1 2025?

The Gabelli Utility Trust (GUT) will distribute $0.05 per share monthly for January, February, and March 2025.

How are GUT's 2024 distributions categorized for accounting purposes?

For 2024, approximately 4% of distributions come from net investment income and 96% are classified as return of capital on a book basis.

When did GUT start paying monthly distributions?

The Gabelli Utility Trust has been paying monthly distributions to shareholders since October 1999.

What are the distribution payment dates for GUT in Q1 2025?

The payment dates are January 24, 2025, February 21, 2025, and March 24, 2025.

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